FINAXIONResearch
Finaxion Research · Stochastic: oversold cross (14, 3) · cryptocurrencies · Recomputed 2026-09-10

Does Stochastic: oversold cross (14, 3) work on BTC/USD?

Stochastic: oversold cross (14, 3) does not beat buy-and-hold on BTC/USD: -59.5 points a year over 12 years.

Total return
-63.9%
Buy and hold
×172
CAGR
-5.7%
Sharpe
-0.05
Max drawdown
-86.3%
Trades
226
Out of sample
—
Years
12
1×10×100×201520162017201820192020202120222023202420252026
StrategyBTC/USD

Findings

  1. Stochastic: oversold cross (14, 3) does not beat buy-and-hold on BTC/USD: -59.5 points a year over 12 years.
  2. Against the S&P 500 over the same window: -19.5 points a year.
  3. Total return -63.9% versus ×172 for buy-and-hold, with 226 trades.
  4. Maximum drawdown -86.3%.
  5. It beats in neither half of the history (split at 2020).
  6. It ranks #232 of 235 markets for this strategy by annual excess over the S&P 500.

Findings derived from the full panel. Each carries its number and its denominator; the computations are reproducible with artifact f4bff284709b.

Exactly what was tested

%K(14) crosses above %D(3) in the oversold zone → entry. Held until %K exceeds 80 → exit.

How to read it

The verdict compares the strategy with buying and holding BTC/USD over the same window, with round-trip costs per asset class. “Out of sample” is walk-forward: the rule is fit on one stretch and judged on the next. A result that beats in the full sample but not out of it is overfit. Full methodology in the protocol. How we test.

Open this backtest with its trades   Trades (CSV)

Every strategy on BTC/USD → · Full page for Stochastic: oversold cross (14, 3) →

How to cite

Finaxion Research (2026). Does Stochastic: oversold cross (14, 3) work on BTC/USD?. Daily backtest 1962-01-01–2026-08-31, artifact f4bff284709b. https://finaxion.app/en/research/stochastic-oscillator/btc-usd

Not a recommendation. Past performance does not guarantee future results.